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i don't think he holds a degree in economics, but he's a smart guy, and the Mises Institute economists occasionally drop his name...in a good way. His major work - the creature from Jekyll Island is a great look at the Federal Reserve and our monetary system. I've read the link you posted before, and don't remember seeing anything that
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i agree. the main thing to take away from higher-order goods is that they generally take longer to start earning revenue and are more difficult to liquidate. to the extent the boom spurs such investments, it will likely make the bust that much more painful. also if existing higher-order goods are allowed to be consumed rather than maintained based on
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I think the problem is that you are taking numerous actions and lumping them together into a single concept, then trying to judge the morality of the concept rather than the individual actions. Murder is bad. Protecting others from murder is good. The plan may have necessitated the former to accomplish the latter, but does that mean the murders became
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" But your explanation of the business cycle implied that A and B would keep bidding each other up and that this would increase the upward pressure on the interest rate. If--as you say now--there are other counteracting factors and one month might be the reverse of the previous, then it doesn't seem like the pressure on the interest rate would
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I wanted to point out one more thing. Keynesians rely on empiricism to "prove" their hypotheses. Austrians base economic knowledge on deduction from a priori statements that are universally valid. I find it strange that the Keynesians hold so strongly onto the idea that stimulus can cause an economy to recover when the empirical data suggests
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"In fact, Mish (an economic blogger) was arguing that the Fed's infusions of cash into the banks would not result in anything resembling hyperinflation partially because it was reserve ratios that prevented them from loaning but capital adequacy ratios." Should read "In fact, Mish (an economic blogger) was arguing that the Fed's
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OK, so when A borrows $1,000,000, the interest rate goes up. What about C who started before A and is using a series of short-term loans to fund a long-term project? When A starts borrowing money and raising the interest rate, doesn't that mess up C's plans--extending the amount of time it will take for C's business to be profitable? And
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Oh, sorry. I guess I didn't realize the mortgages had adjustable rates. Does this mean that existent borrowers had to pay more as the rate went up? Yes, in some cases their monthly payment more than doubled. Consider an "interest-only mortgage" (otherwise known as rent) when the interest rate goes from 2% to 5%. The payment could go from
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Why would spreading the costs over time matter? If instead of requiring $10,000 up front, it required $1000 each year for 10 years, then I'm still advancing the same amount, which I have from my farm business. In fact, wouldn't spreading the costs make the loans less necessary, since I could fund the project through the profits from my farm
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the rates were actually negative in real terms encorging debt financed speculation rather than saving, value investing, and loaning.